Accounting · Accommodation Bills

Assertion (A): An accommodation bill, also known as a wind bill or kite, is a bill of exchange drawn, accepted, or endorsed without any consideration, primarily to provide financial assistance to one or more parties. Reason (R): Under the Negotiable Instruments Act, 1881, the parties to an accommodation bill are not liable to each other, but they are liable to a holder in due course who has given consideration for the bill, even if that holder was aware at the time of taking the bill that it was an accommodation bill.